Credit growth slows to 9.4 percent in February

Mumbai: The Reserve Bank on Tuesday said slowdown in loan pick-up by corporates continued to compress credit growth, with non-food lending expansion falling below the double-digit mark to 9.4 percent in February.

"On year-on-year basis, non-food bank credit rose just 9.4 percent in February against increase of 14.7 percent in February last year," the RBI said in data for sectoral deployment of credit, released on Tuesday.

Credit growth to industry more than halved to 6 per cent from 13.2 percent last February, it said. The slowdown in credit growth was observed across all sectors barring beverages and tobacco and construction.

The credit growth reported by the services sectors was also lower in February at 7 percent against 17.1 percent last year, it said, adding the deceleration was observed across all sectors.

The credit to agriculture and allied activities increased 16.5 percent, which was well over 13.1 percent observed in February last year.

The banking system's lending to the non-bank lenders grew 7.1 percent in February, lower than 14.7 percent last year.

Personal loans, considered as a riskier asset due to the absence of collaterals in many cases, seemed to be the only segment where credit growth is holding up to last year's expansion, with a 16 percent growth in February against 16.5 percent in the year-ago period.

The central bank said the data have been procured from 47 commercial banks and captures 95 percent of the total non-food credit deployed.